Before you fork over the cash and sign on the dotted line, make sure you understand the full value of the business that you’re buying into.

If the seller is using a business broker, remember that the broker’s job is to represents the seller’s interest. For most small business purchases you should perform most of the research on the valuation of your business on your own.

Realizing the Value of A Small Business

You’ll want to know the basic financial process of any business before you buy it - that includes its cash flow, liabilities and any other assets. The business should have a plan, mission statement and client list as part of the package and should also include financial statements from past years and an outline of projected growth for the future.

The package should also include past advertising and marketing efforts and the results of those campaigns, as well as any past correspondence, market tests and bank statements. This is, after all, what you are buying - an established business with established practices - what works and what doesn’t as well as the experience and intelligence of the previous owner.

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Last Modified : August 27th, 2005 Filed under : Home Based Business Navigate : Previous post / Next post